Qualifying Recognised Overseas Pension Scheme

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A Qualifying Recognised Overseas Pension Scheme (QROPS) is any UK-recognised pension scheme that is based outside of UK jurisdiction. Pension Schemes like this are very popular among those living and working outside of the United Kingdom for a few reasons – control of where and how the funds are invested, more accessible administrators and better options for tax planning as an expat.

Unhappy with your current QROPS?

A combination of low returns, high charges or poor service levels from financial advisors may lead to discontent for clients. If any of these issues apply to you, it might be worth contacting a qualified UK Financial Advisor who can suggest ways of lowering costs and improving performance.

QROPS Benefits

One of the main benefits is that you will be able to have greater control of your hard-earned investments regardless of where you reside. If you have more than one pension, you are able to consolidate them all into one manageable pension pot, pooling all the pensions together.

A QROPS also allows much greater flexibility with regards to investment choice, as well as when and how much pension you decide to withdraw. You can retire and take a 25% or 30% tax free lump sum at age 55, instead of waiting until the normal age of 65. If some years you don’t want to take any income, then you don’t need to. This can be a very useful tax-planning tool, making use of a personal allowance.

With a QROPS, you can also exercise greater control over your legacy. As long as you have spent at least five years living abroad, you can transfer your residual pension fund to a beneficiary in the case of your death without it being subject to any deduction, where as in the UK there is often a 50% or 45% reduction in the pension upon death.

Are QROPS expensive?

In some circumstances, the fees of a QROPS are higher than a ‘normal’ pension arrangement, and so the growth of a QROPS must outweigh the additional costs. There are instances where a move from a QROPS to a SIPP is beneficial in order to reduce costs.